The house that Tyreek Davis is renting in College Park is similar to the kind of home he’d like to buy and can afford. It has four-bedrooms, 2.5-bathrooms, a driveway, garage, washer and dryer — an upgrade from the Union City apartment where he previously lived. But it’s not for sale, and none of the other homes in his subdivision are either.
Davis lives in Chatteron Springs, an increasingly popular type of real estate development that experts say is popping up around the Atlanta region, featuring newly constructed homes that were built to rent, not to sell. It’s convenient for Davis, but more expensive than he anticipated, making it harder to save for a downpayment. In addition to paying $2,700 for rent, he said the landlord recently sent him a $400 bill to repair the garage door.
“Sometimes it feels like we’re taken advantage of out here, paying all this amount of money and [repairs] is not being taken care of,” Davis, 24, told Capital B Atlanta earlier this month.
(BH Management Services, LLC, the company that manages Chatteron Springs, says it doesn’t charge residents for “normal wear and tear” repairs and replacements, but damage caused by residents or their guests is the renter’s responsibility.)
Build-to-rent, or BTR, communities began surging in metro Atlanta about eight years ago, after transplants moving to the region from out of state caused home prices to skyrocket.
Metro Atlanta median home prices have soared nearly 60% since 2019, according to Georgia Multiple Listing Service data cited by Urbanize Atlanta. The trend comes as institutional investors making all-cash offers on single-family homes in Atlanta have flooded the market, increasing competition that has driven many Black families to settle for renting homes instead, a factor causing the local BTR market to explode.
Experts are divided on whether BTR communities are good or bad for Black Atlanta residents, who are finding it increasingly difficult to purchase homes at inflated rates.
Proponents of BTR houses say they allow people to enjoy a single-family home lifestyle without navigating the financial hurdles associated with homeownership, including mortgages, insurance, and taxes.
“Having a managed property means that residents are generally not responsible for things like maintenance and repairs,” a spokesperson for BH said. “BTR communities are great for people who need more space or a yard, are in transition to a new home/area, or are not ready to purchase their own home.”
“It doesn’t replace the long-term benefits of owning a home,” added Doug Ressler, manager of business intelligence for real estate data research firm Yardi Matrix. “But it does offer an interim, temporary solution that people can utilize cost effectively.”
Critics insist BTR communities make it harder for Black folks to become homeowners by reducing the number of available houses for sale, which drives up the already-elevated cost of purchasable homes. This contributes to the overall racial wealth gap between Black and white households, as homeownership is a common foundational aspect of building generation wealth.
Build-to-rent houses are usually more expensive than similarly sized apartments, according to the National Association of Realtors, which can make it more challenging for renters who lease them to save for a downpayment on a home purchase.
Zillow data shows the average monthly rent for a four-bedroom home in College Park is just under $1,900. Davis said he spends $800 more than that per month to rent his 2,400-square-foot house.
“People can’t save money if they’re paying ridiculous amounts of rent for properties, so then the dream of homeownership becomes a little bit harder,” Cynthia Crawford, president of Metro South Atlanta Realtists, a local trade association for African-American real estate professionals that fights for greater democracy in housing, told Capital B Atlanta last month.
Atlanta’s build-to-rent boom
Atlanta’s BTR housing inventory grew by 380% between 2017 and 2022, according to the Atlanta Voice. A Point2Homes study released in January indicates that the region has nearly 6,900 BTR homes in the works this year, making Atlanta’s BTR pipeline the third-largest in the nation.
Real estate agent Lori Floyd of Dream Finders Homes, a national home builder that sells houses in Atlanta and Savannah, says BTR homes may be a stepping stone for aspiring homeowners.
“You always want to strive to be a homeowner and not pay somebody else rent,” Floyd said. “But just to get in a home and realize that dream, I think, is beneficial.”
Chatteron Springs tenant Frank Whitfield is a former mayor of Elyria, Ohio, who moved to Georgia last year to accept a position as housing community development manager for the city of East Point. He says BTR communities like his are a good short-term solution for some, but policymakers need to create rules to ensure developers don’t exploit struggling Black locals.
“We’re at the tipping point,” Whitfield told Capital B Atlanta last week, stressing that he was speaking on his own behalf and not representing the views of East Point city government. “We can make some decisions to protect Black folks and protect people in general from being taken advantage of and getting people on a path to ownership. Or it can become hyper-greed capitalism, where there’s no pathway to homeownership and the only way I can get a house is by renting from somebody.”
A barrier to Black wealth?
Crawford says build-to-rent investors are partly to blame for persistent inequality in Atlanta, noting many Black seniors who bought houses in the city decades ago have sold them to Wall Street investors making all-cash offers, who are renting them out and refusing to sell them to young Black families looking to buy their first homes.
A Georgia Tech study released in 2023 estimated that Wall Street investments cost Black Atlantans nearly $700 million in home equity between 2011 and 2021. Crawford noted a National Association of Real Estate Brokers study found the national gap between white and Black homeownership rates is wider now than at any other point within the last 50 years.
“We’re in worse shape with homeownership now than we were in the ’60s,” Crawford said. “It is worse inside the city limits of Atlanta.”
Kim Rice, who lives near Chatteron Springs, was taking a stroll through the neighborhood earlier this week when Capital B Atlanta approached her. She said she and her husband purchased their nearby single-family home four years ago, before home prices and interest rates shot up.
Rice estimated her household’s monthly mortgage payments are roughly half what Chatteron Springs residents are paying to rent homes that are similar to hers. She believes BTR developers are taking advantage of people who either can’t qualify for a home loan or don’t know they’re being exploited.
“If these actual residents can spend [that much on rent], they can actually afford a mortgage,” she said. “So why rent it to them?”
Whitfield says his family’s BTR residence is a temporary stop while he and his wife decide where to buy a house near quality schools for their children to attend. Still, he believes BTR developers should be legally required to offer tenants an option to eventually buy their homes.
“We are paying the cost of a mortgage,” he said. “But when we walk away from here, there won’t be anything to show for it.”
